Obama’s Big China Win at APEC: Not What You Think

U.S. President Barack Obama (L) shakes hands with China's President Xi Jinping during the Asia Pacific Economic Cooperation (APEC) forum, at International Convention Center at Yanqi Lake in Beijing November 11, 2014. (Kim Kyung-Hoon/Courtesy Reuters)

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Let’s be clear, the United States won big this week, but not for the reasons most people think. The media and China analysts have focused overwhelmingly on the climate deal, touting the new commitments from both the United States and China as exceptional, even “historic.” But this is missing the forest for the trees. The real win for U.S. President Barack Obama is keeping China in the tent or, in political science speak, reinforcing Beijing’s commitment to the liberal international order.

To be sure, the climate “deal” is no small deal. The joint announcement—and for the sake of clarity, let’s note that there is no real deal here, just two separate pledges presented together—represents an important step forward for both countries. President Obama has committed the United States to deeper cuts in CO2 emissions than previously put forth, and Chinese President Xi Jinping has promised that China’s emissions will peak around 2030. But it doesn’t get the world where it needs to be with regard to climate change, and many climate experts in both countries appear to agree that much more can and needs to be done by both countries.

The real takeaway from the Obama-Xi meetings at the Asia-Pacific Economic Cooperation (APEC) summit is that China has put itself back in the U.S. game. The entirety of the package—extending visas, establishing rules of the road for maritime and air encounters in the western Pacific, reducing or eliminating tariffs on as many as two hundred information technology goods, and pledging to do more on climate change—is a win for the United States. That doesn’t mean it is not a win for China too; it is. It is just a win that binds China more deeply to U.S.-backed international security, trade, and environmental regimes.

Keeping China in the tent is no small achievement. Over the past two years, since he assumed power, President Xi has pursued a China vision of world order, evincing much more interest in flouting established rules of the road than in buttressing them. He has moved to enforce China’s maritime claims—recognized by no other party—in the East and South China Seas; proposed an Asian Infrastructure Investment Bank that could compete with the World Bank and Asian Development Bank; offered up a new regional security architecture in Asia that would exclude the United States; and initiated an Asia-Pacific–wide free trade agreement that threatens to upend President Obama’s drive to complete the U.S.-backed trade agreement, the Trans-Pacific Partnership (TPP).

The APEC summit does not represent a strategic change for China but a tactical one. Xi is not stepping back from any of his own efforts to establish competing institutions; indeed, he underscored his plans during his joint press conference with President Obama. The U.S.-China relationship will thus continue to be a challenging one underpinned by two competing visions of global order. Nonetheless, the White House can rightly claim a significant win for its China and broader Asia strategy. The pivot has proved its worth; it is here to stay.

Bypassing the U.S. dollar system is a spear-head of Russia’s counter-offensive. Besides monetary war the emergencing cooperation on different pro-Russian fields and energy policy are linked to ongoing geopolitical turmoil.The wider picture includes the Sino-Russian cooperation, the BRICS, the SCO, the EEU, the energy war and other bilateral operations.

It is clear that Moscow seeks an acceleration of its business ties with China. On Nov. 09, 2014 President Vladimir Putin and Chinese leader Xi Jinping signed a memorandum of understanding on the so-called “western” gas supplies route to China. Russia’s so-called “western” or “Altay” route would supply 30 billion cubic meters (bcm) of gas a year to China. The new supply line comes in addition to the “eastern” route, through the “Power of Siberia” pipeline, which will annually deliver 38 bcm of gas to China. Work on that pipeline route has already begun after a $400 billion deal was clinched in May. It should be noted that the both deals together are propably the bigest deal in the world – the total amount of this gasinvestment and -trade is over 700 bn USD. In addition also 16 other tradedeal was signed.

During the July (2014) BRICS Summit in Brazil the five members agreed to directly confront the West’s institutional economic dominance – the New Development Bank (NDB), the Contingent Reserve Arrangement and the BRICS Interbank Cooperation Mechanism were new innovations.

The Shanghai Cooperation Organization (SCO) is expanding – recently it approved India, Pakistan, Iran, and Mongolia for membership in the organization. Also SCO has received applications for the status of observers from Armenia, Azerbaijan, Bangladesh, Belarus, Nepal and Sri Lanka. In addition China wants to build a new Asia-Pacific security structure that would exclude the United States.

Also Eurasian Economic Union (EEU) is expanding: Armenia already joined, the next candidate in the list on the accession of Kyrgyzstan, and later, his desire to join the EEU expressed and Vietnam. Also the accession of Turkey and Syria are on the way. The geopolitical situation is now transforming from traditional Sino-U.S. relations to U.S.-China-Russia triangle in which China, rather than the United States, will be the central player. With China signing the gigantic natural gas deal with Russia and the president of China publicly stating that it’s time to create a new security model for the Asian nations that includes Russia and Iran, it’s clear China has chosen Russia over the U.S.

In my conclusion the era when the IMF, World Bank, and U.S. Treasury could essentially dictate international finances and intimidate or crush opponents with sanctions, pressure and threads are drawing to a close – the BRICS and the Shanghai Cooperation Organization are two nails in that coffin. These independent poles (BRICS, SCO, USAN) are developing fast and it remains to see what their ultimate impact on international politics will be – my scenario is that the impact will be a drastic shift from U.S. dominance to more balanced juxtaposition of U.S. and Eurasia.

Very important article, although Ms. Economy accepts uncritically the alarmist view on anthropomorphic global warming.

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